Initial Jobless Claims Trending Towards New Low

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses unemployment insurance claims.

Good news for the job market: initial unemployment insurance claims for the week ending January 19 fell by 5,000 from the previous week’s level to hit a new low of 330,000, the lowest since March 2008. Initial claims for unemployment insurance now appear headed towards the typical levels seen before the economic downturn.

The insured unemployment claims also fell to 3.157 million for the week ending January 12 from the previous week’s level of 3.228 million. A drop in the number of the insured unemployed indicates either fewer unemployed or fewer eligible claimants because they have exhausted the maximum number of weeks to claim unemployment insurance.

The jobless claims data point to an improving job market. However, measures to keep the fiscal deficit on a more sustainable path will continue to impact on the pace of economic recovery. Under this scenario, NAR expects the economy to grow at a modest pace of 2.3 percent in 2013 which will generate 1.4 million net new non-farm payroll jobs. The gains in employment, coupled with continued low interest rate and improving house prices, can sustain 5.08 million of existing home sales.